Sustainability review

The sustainability review covers Grindrod’s environmental, social and governance (ESG) policies, practices and performance for the financial year ending 31 December 2010 and covers all group company activities around the world, including impacts on communities and the environment. In line with the King Code and Report on Governance for South Africa (King III) which calls for greater integration of considerations into financial management and reporting, Grindrod views sustainability holistically and has started the process of introducing key performance indicators (KPIs) which integrate financial and non-financial indicators. In addition, greater emphasis on non-financial performance can be found in the divisional reviews. Further improvements were made in the measurement and reporting of sustainability KPI across the ESG spectrum in the year in review. Where possible/applicable year-on-year trend data has been given, new sustainability KPI have been introduced and data has been normalised and integrated with financial information. Besides King III, Grindrod’s sustainability reporting has also been shaped by:

•	The international greenhouse gas (GHG) Protocol. The company’s climate change reporting strategy and by implication the reporting of other environmental KPI, has been guided by this protocol. Details of the rationale and implications of the change from an equity share approach to an operational control approach for the reporting of Grindrod’s climate change footprint, are outlined in the Environmental Performance report.
•	The Global Reporting Initiative’s (GRI) G3 guidelines. Grindrod has used the measures advocated by the GRI in most of its sustainability KPI. Refer to the GRI index. As can be seen from this index Grindrod’s reporting on many sustainability indicators is covered in other parts of the Annual Report.
•	The international Social Responsibility Standard ISO 26000. Grindrod has attempted to cover, in its reporting, the seven core aspects of good corporate social responsibility as outlined by this standard (see diagram below).

Corporate Social Responsibility as defined by ISO 26000

Figures denote corresponding clause numbers in ISO 26000.

For the first time this year, Grindrod made use of the services of an independent verification agency to provide assurance around sustainability reporting. A limited assurance process was completed by Deloitte. Detailed findings will be acted on by the group environmental and climate change committee to drive further improvement in the accuracy and completeness of sustainability monitoring and reporting and in particular the environmental sustainability monitoring and reporting. Sustainability performance highlights for the year included:

•	Re-admission to the JSE Socially Responsible Investment (SRI) Index. Grindrod has been part of this index since 2005;
•	The development and board approval of a new Grindrod group environmental and climate change policy. The policy includes new quantifiable objectives and targets in a number of areas, improved integration of environmental key performance indicators (KPI) into core business management and enhanced focus on climate change mitigation;
•	The functioning, for the first full year since its formation last year, of the group environmental and climate change committee, which reports to the chief executive officer and overseeing the implementation of the above policy;
•	Further progress with the company’s Broad-based Black Economic Empowerment (B-BBEE) strategy and was awarded the KwaZulu-Natal Best BEE Deal/Project of the Year in 2010;
•	Significant progress with ISO 14001 environmental management system (EMS) roll-out. Unicorn Shipping received certification in 2010 (seven vessels and land based operations) and more than 30 sites within Freight Services are on track to receive certification in 2011;
•	Progress with the development of a long-term climate change strategy. Freight Services have developed an action strategy and the same will be developed for other divisions in 2011;
•	Grindrod’s participation in the global carbon disclosure project (CDP) for the first time in 2010 and will do so again in 2011; and
•	Review and consolidation of governance policies.